Sunland HOA orders members to pay for legal questions

by Art Thomason - Dec. 3, 2010 07:07 AMThe Arizona Republic

Last summer, two east Mesa women questioned their homeowners association board about some of its actions, including a $5,500 expenditure to create a charitable foundation to accept tax-deductible donations.

But Pat Haruff and Barbara Worbington said they got nowhere with their queries and believed that the board was not acting within the best interests of the association's members.

So they hired an attorney to do their talking.

Now, the Sunland Village Community Association is demanding that they pay $4,867.50 to cover the legal costs the board ran up answering their grievances.

"We trust that your clients now fully understand their mistakes and misunderstandings that caused them to assert the baseless claims," HOA attorney Jason Smith said in a letter to the women's attorney. "If they had followed the procedure of notifying the association of their complaints before rushing to an attorney's office, all of the expenses could have been avoided."

Haruff and Worbington called Smith's assertion "outrageous" and said they confronted the association's board of directors several times before consulting the attorney.

Their attorney, Stewart Gross, described the claim as "pure intimidation" and said it may be the first of its type used by an HOA to silence critics who merely question an association's elected leaders.

"I don't think they have the grounds to punish us for daring to challenge the way they do things," he said. "We didn't file a suit against them."

He said Haruff and Worbington merely had him send a letter of inquiry after their initial questions were ignored.

"They didn't violate any of the association's rules," he said.

In a May 27 letter to the board, Gross outlined six complaints by the women, including the attempted formation of a non-profit, charitable corporation that would allow the HOA to accept gifts from member estates and other donations without any tax penalties.

Haruff and Worbington contended the charity was in violation of state and federal law.

Another complaint involved the failure to accurately record minutes of recent board meetings. The women also objected to "mini" meetings conducted by the board before regular meetings and weren't open to all members.

Smith said the women's complaints had no merit.

"The issues raised were considered to be frivolous and harassing by the board and not designed to better the community or to improve the governance of the association," he said in his letter.

He could not be reached for comment despite repeated attempts.

State Sen. Eddie Farnsworth, a longtime advocate of restricting HOA powers, said the turmoil at Sunland appears to be indicative of a widespread problem among many HOAs in the state.

"One problem we have seen is that access to information is critical to HOA members, and too often HOAs decide that members are not entitled to it and don't have a right to question the use of funds. HOAs have a fiduciary responsibility to their members."

Farnsworth said he has no problem generally with HOAs.

"If operated properly, they serve a useful purpose," he said.

But lack of transparency and lack of oversight seems to be a common thread among problematic HOAs, he said.

"They use members' money to fight that transparency and oversight," Farnsworth said.

Former state Sen. Tom Freestone, who initiated Arizona's first legislative inquiries into questionable HOA practices several years ago, said the association's claim against the women exemplifies one of the most prolific complaints about many HOAs - their overreaching actions to penalize homeowners with excessive charges for minor incidents.

"Many times when they get these bills it scares them to death and they'll do anything to reconcile," Freestone said.